Synopsis
The Indian food services market is expected to grow from $80 billion in 2024 to $144-152 billion by 2030, driven by online food delivery, cloud kitchens, and changing consumer habits. The organised sector is expanding rapidly, and multi-brand strategies are proving successful.Key Takeaways
- The Indian food services market is projected to grow significantly by 2030.
- Cloud kitchens are revolutionizing the industry.
- Consumers are increasingly opting for delivery and dining out.
- Multi-brand strategies are essential for scaling businesses.
- Challenges remain for companies trying to expand rapidly.
Bengaluru, Jan 29 (NationPress) The Indian food services market, currently valued at $80 billion in 2024, is projected to expand at a compound annual growth rate (CAGR) of 10-11%, potentially reaching $144-152 billion by 2030, as detailed in a recent report released on Wednesday.
The organised food services segment, which now represents half of the total market, is growing faster than its unorganised counterpart, spurred on by the surge in online food delivery and the influx of new brands, according to the analysis by Redseer Strategy Consultants.
Cloud kitchens are thriving by utilizing shared infrastructure and resources to manage multiple brands, thereby disrupting traditional dining paradigms. This model provides scalability and flexibility to address the varied preferences of different demographic groups.
These cloud kitchens achieve rapid growth and efficiency by leveraging shared kitchen spaces, which drastically lower capital expenditure and operational costs.
Rohan Agarwal, Partner at Redseer Strategy Consultancy, stated, "The plug-and-play structure of cloud kitchens enhances scalability, enabling new brands to reach Rs 100 crore in revenue within just 2-3 years, a stark contrast to the 6-10 years typically needed by dine-in focused establishments."
Consumers in metropolitan and tier 1 cities are increasingly favoring home delivery and restaurant dining, motivated by convenience and a desire for a change from their daily routines.
Moreover, dining out is becoming a social occasion, offering chances to enjoy quality time with family and friends while celebrating various events, as highlighted in the report.
The influence of social media, pop culture, and the quest for diverse culinary experiences have spurred the demand for niche cuisines, leading to increased dining frequency.
The report also emphasized that successful multi-brand strategies have emerged as a key success factor, allowing businesses to diversify their offerings, spread risks, and efficiently expand across different customer segments and meal times.
Interestingly, merely 1-2% of Indian companies have scaled beyond Rs 500 crore, with the majority of this success attributed to multi-brand strategies.
However, for these companies, merely increasing the number of outlets to achieve scale may lead to diminishing returns, especially in a diversifying market filled with new culinary options and service models, the report concluded.
